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Adding to the Gloom

October 9th, 2008 at 06:55 pm

PG's blog about her Boulevard of Broken Dreams made me think I should do my own.

However, while I was looking up photos of our wasteland of empty retail spaces and unfinished (& barely started) housing developments, I also decided to check out the real estate prices in our neighborhood.

Bad Move. Eeks!!!!!

It's official. & just like that, real estate values have fallen below to what we paid back in 2001.


I really didn't think it would happen.

What is scarier is that at this point it is spiraling downwards in such a viscous cycle.

As for us? Eh. We still have a solid $50k-$100k equity. Payments are still quite reasonable on our income. Even more important, we bought here because it was so considerably cheaper than where we come from. So while there may be panic in the streets I still feel better off where we are at - even if we have some pains to go through in the interim.

But it is scaring the hell out of me. Rates of foreclosures are already very high. This pretty much means few in our neighborhood can refi now. We bought the low of the low. Unless more people put a lot of cash down, I don't know. Somehow I doubt it! No more refi-ing. More lost jobs in the horizon. Which equals more foreclosures. And so it goes...

I worry how devastating this all could be for our neighborhood. We've been hanging on, but it's taken a wilder turn.

I still stand by it would be crazy for home values to fall to the $100k level again, in the area, for the long run. But I am starting to see that in the interim, it may come to fruition.

Maybe it's kind of sad because now everything we did right was for naught. We could have still been in our condo, sold it for $400k today, and swoop in an buy some $100k house in a year or something. Man! IF only I had my crystal ball!

I have also been rolling my eyes because a lot of VERY anti-owning friends and acquaintances have been jumping on the house purchase band wagon. THat just really annoys me. I was stupid to pay $300k for a house but suddenly you are running to spend $350k on the same house? They were clear how stupid they thought we were. So I find it ironic. Renting is only good until you change your mind I guess. (I guess they are worse off than us now. For today anyway).

Anyway, I guess we are still better off than if we had rented all these years. I mean heck, find me a house like ours we can rent for under $1k per month and stay in forever if we like. I guess I still am happy with our lot.

But I must admit today I am bummed to enter negative equity territory.

My net worth is also due for a serious adjustment. I had been using assessed value as a fair measure, but always said I would drop it lower if house prices went lower, because we would lose ground. (But I was not adjusting upward for such a volatile housing market). My net worth just went down a good $40k or so from assessed value. It's depressing. Now we aren't losing equity. WE are losing the cash we put into the house.

I am sure it will turn around in the long haul, don't get me wrong there.

I do feel lucky for one thing today. I feel lucky our development was completely built. Construction started in 2001 and finished in 2006 or so. I would always say we had advantage to get in the ground floor. Pffft, guess it doesn't matter any more.

Anyway, a lot of developments in the area with a handful of completed houses, a handful of unfinished houses, and a huge mess of empty house lots. Some people are living in those developments. UGH! How scary is that. I am relieved that we are at least not in that situation today. At least our neighborhood is whole.


Anyway, yeah - that house I Saw:

Bought $310k in 2002
Sold $580k in 2006
Foreclosed for $445k in 2007 (I assume this means they had actually put like 25% down - yeesh)

SOLD $279k by bank 2008

Our house is slightly smaller and price we paid to builder was $285k in 2001. We put some cash into landscaping and such and I am a rounder so in my mind we paid $300k. & clearly we have dropped below that - maybe to $250k territory.

A lot of houses still asking upwards of $300k, but also clearly sitting empty. One like our model just dropped its $370k price (bank owned) to $310k. You're thinking, "why not $299k and just get it over with?" Yeesh. So this one sale could be an anomally (it has sat bank-owned for over a year while many others sold) but who knows any more. The number of foreclosures are increasing and I think it is clear there will be more $2xxk sales.

1 Responses to “Adding to the Gloom”

  1. mom-sense Says:

    Our real estate property values are down $200K since this time last year. We thought that $850K was a good estimate; the sad reality is we are probably around $635-$650 and we owe $280K. UGH!

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